In a blog post published today, Coinbase CEO Brian Armstrong outlined a blueprint for effective cryptocurrency regulation. Armstrong discussed the major topic abounding the industry, and how it can move forward amidst a difficult year.
Coinbase is a well-known cryptocurrency exchange platform that is feeling the effects of a down year. The collapse of FTX and general economic circumstances have led to a “crypto winter” that has tested the market’s resistance. Yet, the problem of regulation feels like the greatest challenge for the industry.
Coinbase CEO Calls for Regulation
Brian Armstrong calls the question of regulation “one of the most common questions I get asked by folks,” in his blog post. In the wake of the tragic demise of FTX, it seems even more necessary. Coinbase, a leading exchange, is among those punished the most by customer concern over unregulated exchanges.
Subsequently, the post sees Coinbase CEO Brian Armstrong outline what effective cryptocurrency regulation would look like through a U.S. lens. Undecidedly detailed, Armstrong starts out with the first step of his proposal; “regulatory clarity,”
“It’s best to create regulatory clarity first around centralized actors in crypto (Stablecoin issuers, exchanges, and custodians),” Armstrong stated. Additionally, noting that a lack of clarity is where the most risk and harm comes to users.
Among that call for clarity, Armstrong headlines Stablecoins, Exchange and Custodians, and Commodities and Securities as entities that must be clarified by regulators. Specifically, Armstrong calls for Congress to require the CFTC and SEC to publish categorizations of the top 100 crypto assets “within 90 days” of legislation.
The second step in Armstrong’s play is to “enforce a level playing field.” Specifically, for the above clarification to sport enforceable rules. Armstrong points to FTX’s ability to create a broad customer base, freeing it from specific domestic jurisdictions from any one entity. Armstrong states that enforcement starts with countries’ willingness to enforce rules domestically and abroad.
Conclusively, the third step is for innovation to occur in “decentralized crypto.” Armstrong remarks that his plan is how to “regulate centralized actors in crypto.” While noting that decentralized crypto has “an opportunity to create even stronger consumer protections.” Utilizing smart contracts, self-custodial wallets, and on-chain accounting, Armstrong perceives this as the future. Allowing the industry to begin,”encoding trust,” in a real way.